In looking for new items to buy on Ebay, such as a digital camera or an HD DVD player, we've noticed that sometimes the final price ends up to be more than the item costs at a local retailer. Not all items are like that, but popular ones can easily be.

What we decided to do is to never bid more than we can buy the item or like-kind item at a local retailer.  We look at the local prices, add the local sales tax, reduce that by about 5%, and make that our top price, after subtracting the shipping amount of the ebay item.  Reason we reduce it by around 5% is because it really doesn't make sense to buy it on ebay for the exact same price as what you can pay at a local retailer, where you can carry it out and get an easy return policy, etc.

So far, we have bid on several digital cameras and have won none.  They are going for about 10% more on average on ebay than what we've seen them for in the ratailers here.  Our suspicion is that we'll end up buying one locally when the big after-Thanksgiving sales are in effect.

However, we have purchased on ebay several brand-new items for less than their counterparts at local stores, such as brand new speakers and sub-woofer, and brand new DVDs.  So it's still a great market anyway.